Overview of GST
On 18-08-2017 at JP Celestial, Bangalore
-BY CA B D Chandrashekar
M/s. Shekar & Yathish
Bangalore
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Brain Teasers
• Some months have 30 days, some of them have 31 days, how many of them have 28 days?
• I went to bed at 8 o’clock in the evening and wound up the clock and set the alarm to sound at 9 o’clock in the morning. How many hours sleep would I get before being woken by the alarm.
• Take 2 apples from 3 apples. How may do you have?
• Intro about GST • Taxes Subsumed & Not subsumed • Levy & Supply
– Time of Supply – Place of supply – Value of Supply
• Input Tax Credit • Registration • Records and Accounts • Returns & Transitional Provisions
Over View of GST
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EVOLUTION OF TAXES ON
SUPPLY SERVICE GOODS
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• GST is a comprehensive tax levied on manufacture, sale and consumption of goods and services across India.
• GST is a Destination based Consumption tax, and the taxable event is Supply as against the existing taxable events of sale, manufacture or provision of service.
• GST is a Compliance based law.
GST - Intro
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Central Taxes to be subsumed into GST
CGST
Central Excise Duty
Additional Excise Duty
Service Tax
CVD SAD
Cess
Surcharge
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State Taxes to be subsumed into GST
SGST
VAT
Ent. tax
CST
Entry Tax
Luxury Tax Betting
Tax
Purchase Tax
Cess
Surcharge
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Taxes not subsumed in GST
1. Basic Customs duty 2. Alcohol for human consumption 3. Stamp duty and Property tax 4. Toll tax 5. Mandi Cess etc levied by Local authority 6. Profession tax 7. Motor Vehicles tax 8. Entertainment Tax (levied by local bodies) 9. Petrol / Diesel / Aviation fuel / Natural Gas* *Shall not be subject to levy of GST till a date notified on the
recommendation of the Goods and Services Tax Council.
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SUPPLY & LEVY
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Supply definition
7. (1) For the purposes of this Act, the expression “supply” includes––
- all forms of supply of goods or services or both
- such as sale, transfer, barter, exchange, licence, rental, lease or disposal
-made or agreed to be made
-for a consideration
-by a person
-in the course or furtherance of business;
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Supply – Sample Examples
• Sale of goods { Local , Interstate, Export Etc. } • Service Income
– Repair Services – Commission received
• Other Income – Renting of property – Earning of interest income
• Barter & Exchange of goods – Two supplies • Sale of car ( used for business ) • Transfer to branch located in another state Tip : Check your credit side of P & L Account & credits in your capital
account ( Keep a check on every receipt – whether GST is applicable? ) Shekar & Yathish 13
Individual/Composite /Mixed Supply
• Single Supply of good / Service – Individual supply
• Composite Supply – Two or more taxable supplies naturally bundled & one is a principal supply (Predominant element) – Rate applicable of principal supply.
• Mixed Supply – Two or more individual supplies for a single price which is not composite supply – Rate applicable is highest rate.
• Example : Haldiram’s Gift Box
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• Forward Charge
- is on the Credits / Receipts
• Reverse Charge
- is on the Debits / Payments
Levy
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Reverse Charge – Notified goods/Services 9(3)
Services Notification 13/2017
• GTA – Goods Transport Agency
• Advocate Services
• Sponsorship Services
Goods : Notification 4/2017
• Cashew nuts, not shelled or peeled
• Bidi wrapper leaves (tendu)
• Silk yarn
• Lottery.
Rs.5,000/- limit not applicable to such services
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Reverse charge – Unregistered Person 9(4)
9(4) : Taxable goods or services or both received by registered person from an unregistered person
– Spares purchased from URD – Rent paid – Stationery – Professional Charges – Repairs & Maintenance
Relaxation : Rs.5,000/- for all such supplies in a day, Notification 8/2107 Egg: Stationery -1000, computer Repairs -1000, Spares – 2000 on 5th July 2017 let us
say these are the payment entries in your books (Then RCM NOT required at respective rates)
Tip : Check the debit side of your Trading & P/L A/c and analyze whether any goods or
services procured from URD Challenge – Identification of the rate of tax by identifying the proper HSN code
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Time of supply - Goods
Regular Goods Sold – Date of invoice issued or – last date on which it had to be issued ( Before or at
the time of delivery of goods)
• RCM Purchases The date of receipt of goods The date of payment entered in books or credited in
bank account 30 days from the date of issue of invoice Date of entry in books
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Earliest of the following – Date of issue of invoice ( if issued within 30 days or date of
payment – Date of provision of service (if invoice not issued within 30
days ) or date of payment – Date of Sale entry in books
RCM Service Purchase
The date of payment entered in books or credited in bank account
60 days from the date of issue of invoice Date of entry in books
Time of Supply - Services
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POS
Vendor Customer
Exports CGST + SGST IGST
Customer IGST
CGST + SGST
NO TAXES
Imports Customs Duty Vendor
IGST IGST
Factory
Godown
WareHouse
NO TAX
Out of India Your StateRest of India
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Local / Intra State – CGST & SGST ( C + S ) Inter State – IGST ( I ) • Location of Supplier (LOS) & Place of Supply (POS)
If LOS = POS, then C & S If LOS is not = POS, then I
Place of Supply for goods where delivery terminates to recipient
Bill to Ship to Model : Bill to Party
Note: Goods sold to foreign Tourist must be charged IGST
Place of Supply - Goods
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Thumb Rule
- Made to registered person then - location of such person
- Made to unregistered person - The location of the recipient where the address on
record exist
- The location of the supplier of services in other cases
Place of Supply - Services
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12 Notified services : Separate POS
1. Immovable property related services
2. Restaurant, Catering, fitness,etc
3. Training & performance appraisal
4. Admission & Entry to Amusement park etc
5. Services by certain organizations like organizing fair, exhibition, events etc.
6. Transportation of goods (RP or location where goods are handed over)
7. Passenger Transportation Service
8. Services on board conveyance Vessel, air craft, train, motor vehicle
9. Telecommunication services
10. Banking & Financial services
11. Insurance Services
12. Advertisement services
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Valuation
Transaction Value - Price actually paid between unrelated parties & Price is the
sole consideration
Inclusions
- Taxes & duties paid (other than under GST Act) - Amount supplier is liable to pay but incurred by recipient - Incidental expenses like commission, packing etc - Interest, Late fee, Penalty for delayed payment
Exclusions Discount – given before or at the time of supply & duly recorded in invoice.
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REGISTRATION
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Aggregate Turnover { Across India } – > 20 Lakhs in other than notified states and > 10 Lakhs in notified states – Turnover includes = { Taxable Supplies + Exempt Supplies + Exports + Inter
state supplies – GST }
Mandatory registration - Inter state supply - Casual Taxable Person + Non resident Taxable persons - Persons required to pay under reverse charge - Sale Thru E commerce operators - TCS - Persons required to do TDS - Govt - Persons making taxable supplies on behalf of other taxable persons
whether as agents or otherwise - Input Service Distributors
Registration – Mandatory Sec 22 & 24
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• Exclusively dealing with exempt supply or non taxable supply
• An agriculturist – means Individual or HUF who undertakes cultivation of land (subject to certain conditions
Persons not required to register : Sec 23
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Registered voluntarily :YES – all provisions shall apply. – Collect & Pay Tax from Rupee 1 – File Returns – Cannot cancel for one year
• Earlier Registered under– VAT, Service Tax, Luxury Tax, etc. – Mandatorily migrate. – Can apply for cancellation / Composition
• Amendment to details possible – Core fields like Place of business, PAN change etc. requires
approval of officer. – Non-core fields do not require approval of officer – Egg: Bank
details, HSN codes
Voluntary Registration/Cancellation/Amendment
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• Turnover less than 75lakhs in preceding financial year
• Stock on 1st July must not include stock purchased from inter state
• Should not render services (exception – food related)
• Should not make inter state supply
• RCM applies to composition dealer as well
• Rates – Traders – 1%; Manufacturer – 2%; Service Provider – 5%
• Need to file GST CMP-01 within 16th August
Composition - Conditions
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INPUT TAX CREDIT
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SET OFF’S
CGST
• CGST
• IGST
SGST/UTGST
• SGST/UTGST
• IGST
IGST
• IGST
• CGST
• SGST/UTGST
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INPUT TAX CREDIT
33
Input Credit
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ITC
Generally All Credits
Used in Business
Not Available
Not used in Business
Used for Exempted
Sales
Restricted Credits
motor vehicles &
other conveyance
s-
Food & beverages,
outdoor catering,
beauty
treatment, health
services, cosmetic & plastic surgery
Other
Club members
hip
Rent a cab, life &
health insurance
Constructio
n servic
es
Goods lost, stolen,destr
oyed,
written off or disposed of by way of gift or free samples.
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Taxable supplies & exempt supply : Identification at invoice level
- Wholly Non business supplies credit – T1 - Example: Buy a mobile phone to gift to your wife.
- Wholly Exempt Supplies Credit – T2 - Example : Manual sprayer – Transportation charges
- Blocked Credits – T3 - Example : Purchase Benz Car
- Wholly Taxable supplies credit – T4 - Example : Transportation towards Chainsaw
- Common credit C2 apportionment – Ratio of exempt supply & taxable supply
- Ex: Rent paid ( used for both taxable supply & exempt supply ).
Apportionment of credits
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ACCOUNTS & RECORDS
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Records
• Taxable Supplies – Tax Invoice • Exempt Supplies & Composition RP – Bill of Supply • Advance received – Receipt Voucher ( Tax to be paid ) – If rate & nature of
transaction known accordingly – Otherwise IGST /18% • RCM – Self Tax Invoice & Payment Voucher – Consolidated Self Tax Invoice for
whole month in case of 9(4) RCM • Other than supply – Delivery Challan –Job work / Sale on
Approval/Demo/Exhibition – E way bill (Rs.50,000/- or more) • Revised Tax Invoice – New registration between effective date of registration &
date of certificate of registration • Credit notes – Reduction in value – Egg: Sales returns • Debit notes – Increase in Value NOTE : PURCHASE RETURNS CANNOT BE INITIATED IN GST FOR CONTROL PURPOSES. FORMATS
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Accounts
• Production or manufacture
• Inward & Outward Supply
• Stock of goods
• Input Tax Credit availed
• Output tax payable & paid
• Also declare godowns & branches as additional place of business & keep details pertaining to that branch there.
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• If there is excess of input credit in VAT monthly return of June – then SGST opening credit
• If there is excess of input credit in service tax return or excise return – then CGST opening credit
• To be filed through GST TRAN 1 and then only it will available
• In case of Traders • ITC on goods manufactured in India & Excise duty paid
document available. (subject to conditions) • Deemed Credit (60% / 40% of CGST portion & 30% / 20% of
IGST portion) – only goods manufactured in India and excise duty paid document not available (subject to conditions)
Transitional Provisions
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RETURN FILING
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List of Forms - Returns SL No
Form No Title of the Form
1 Form GSTR-1 Details of Outward Supplies
2 Form GSTR-1A Details of O/s as added, corrected or deleted by recipient
3 Form GSTR-2 Details of inward supplies of -Taxable goods -Services for claiming input credit
4 Form GSTR-2A Details as furnished in GSTR 1 by supplier
5 Form GSTR-3 Monthly return – Based on details of Outward supplies, Inward supplies along with payment of amount of tax
6 Form GSTR-3A Notice for non filing – under Sec 27 /Sec 31
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List of Forms - Returns
SL No Form No Title of the Form
7 Form GSTR-4 Quarterly return for compounding taxable persons
8 Form GSTR-4A Details of inward supplies to the recipient under Composition scheme on the basis of Form GSTR-1 by Supplier
9 Form GSTR-5 Return of Non – resident
10 Form GSTR-6 ISD Return
11 Form GSTR-6A Details of Inward supplies to an ISD recipient on the basis of Form GSTR-1 by the supplier
12 Form GSTR-7 Return for authorities deducting TDS
13 Form GSTR-7A TDS certificate
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List of Forms - Returns
SL No Form No Title of the Form
14 Form GSTR-ITC-1
Communication of acceptance, discrepancy or duplication of ITC
15 Form GSTR-8 Details of supplies effected through e-commerce operator and amount tax collected under Sec 43C(1)
16 Form GSTR-9 Annual return
17 Form GSTR-9A Simplified Annual return by Compounding taxable persons registered under Sec 10
18 Form GSTR-9B Reconciliation Statement
19 Form GSTR-10 Final Return (Surrender/Cancellation)
20 Form GSTR-11 Details of inward supplies to be furnished by a person having UIN
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Who needs to file returns
under GST?
Return
GSTR 1 Outward supplies
GSTR 2 Inward
supplies
GSTR 3 Monthly return
GSTR 4 Quarterly
return
GSTR 5 Periodic return
GSTR 6 ISD
GSTR 7 TDS
GSTR 9 Annual return
Normal/regular tax payers a a a a
Compounding taxpayer a a
Casual taxpayer a a a
Non- Resident taxpayer other than foreigner
a a a
Non- Resident foreign taxpayer
a
Input Service Distributor a
Govt. Dept., agency, local authority
a a a a
Due Date 10th of next month
15th of next month
20th of next month
18th of next month to quarter
Last day of registration/Monthly
13th of next month
10th of next month
By 31st December of next FY
Assessee
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Due date for next 2 months
• Note 1 – If credit carried forward from earlier regime, then return filing date extended till 28-08-2017
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Month GSTR – 3B GSTR – 1 GSTR – 2 (auto
populated from
GSTR-1)
GSTR - 3
July, 2017 20th August
-Note 1
1st – 5th
September 2017
6th – 10th
September 2017
11th to 15th
September 2017
August,
2017
20thSeptem
ber
16th – 20th
September 2017
21st – 25th
September 2017
26th to 30th
September 2017
Penalty
Frequency Returns Penalty (CGST
+SGST)
Monthly GSTR -1 ,2,3,6,7 Rs 100 per day subject To Maximum of Rs.5,000
Quarterly GSTR 4 – 18th of Next Quarter
Rs 100 per day subject To Maximum of Rs.5,000
Annual Return GSTR 9 – 31st Dec end of Financial year
Rs 100 per day subject To Maximum of 0.25% of Aggregate Turnover
Final Return – Surrender
GSTR 10 – 3 months form the date of Cancellation
Rs 100 per day subject To Maximum of Rs.5,000
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Normal/Regular Tax Payers – Monthly Return
• Upload details of outward supply on 10th of subsequent month
GSTR-1
• Data will be auto populated in 2A of Recipient tax payer
GSTR-2A • Additions, modifications and deletion by recipient will be made available to supplier and submitted on 15th GSTR-2
•Corrections in Form GSTR-2 will be made available to supplier
•Supplier has to accept or reject adjustments by 17th
GSTR-1A •Auto-populated return will be available for submission along with the payment on 20th
GSTR-3
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Ratna Steels Portal Super Cars Ltd Portal
Ratna Steels GSTR-1
Ratna Steels Outward Supplies
Register
Super Cars Ltd
Ratna steels Rev Automobiles
Books of Super Cars Ltd for July Inward Supplies Register Outward Supplies Register No Qty Amt GST
Tot.
225 2,25,000 40,500
No Qty Amt GST
Tot.
215 2,36,500 42,570
No Qty Amt GST
Tot.
225 2,25,000 40,500
6 100 1,00,000 18,000
6 100 1,00,000 18,000
7 50 50,000 9,000
7 50 50,000 9,000
8 25 25,000 4,500
8 25 25,000 4,500
10 50 50,000 9,000
10 50 50,000 9,000
1 80 88,000 15,840
4 45 49,500 8,910
2 60 66,000 11,880
3 30 33,000 5,940
Aug
10 Super Cars Ltd GSTR-1
1 80 88,000 15,840
4 45 49,500 8,910
2 60 66,000 11,880
3 30 33,000 5,940
Aug
11
6 100 1,00,000 18,000
6 1,00,000 18,000
Aug
15
Ratna Steels GSTR-1A
6 1,00,000 18,000
In.No Amt GST
6 1,00,000 18,000
Aug
16
Aug
21
6 100 1,00,000 18,000
Payment Payment
Aug
20
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FLOW OF GST INPUT
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For any clarification [email protected]
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